Mr. Ankush imported the goods from France and applied for warehousing of the said goods. The Proper officer made an order permitting the deposit of…

If goods remain in a warehouse beyond a period of 90 days from the date on which the order permitting deposit in warehouse is made, interest is payable @ 15% on the amount of duty payable at the time of clearance of the goods, for the period from the expiry of the said 90 days till the date of payment of duty on the warehoused goods. Further, the facts of the given case are similar to the landmark judgement of Pratibha Processors v. UOI 1996 (88) ELT 12 by Supreme Court. In this case, the Apex Court observed that: (i) if the warehoused goods are cleared beyond specified time, interest is payable on the amount of duty "payable or due” on the warehoused goods. (ii) In this case, on the date of clearance of the goods, no duty is payable. Thus, the goods are not exigible or eligible to duty at the time of clearance. In view of the above observations, the Supreme Court held that since the principal amount for computing interest is the amount of duty payable on clearance of goods, which is nil, interest payable is also nil. The interest is necessarily linked to the duty payable and if no duty is payable, there will be no liability of interest. The liability to pay interest is solely dependent upon the exigibility or actual liability to pay duty. Thus, in case where the liability to pay duty is nil, the interest will also be nil. Thus, in view of the above, since in given case, Mr. Ankush has exported the goods from warehouse without payment of duty, no interest is payable by him.